2014 Forecast: Tech Trends in Commercial Banking

Banks have launched new online and mobile products for treasury clients, but in the year ahead they need to focus on education and training to ensure adoption and strengthen relationships.

Banks have been increasing their digital banking capabilities for commercial and treasury customers, but now they need to step up efforts to educate those customers on their new capabilities, says Mark Ranta, senior product marketing manager at ACI Worldwide.

Many treasury professional are unaware of the online and mobile products and services that their bank offers and the benefits that they enable, ACI found in an informal survey of 127 treasury professionals at AFP Exchange earlier this month. For instance, although 50% of the respondents said their bank offers mobile banking for treasury clients, 35% of them said they don’t use those mobile offerings by choice.

“Some of the treasury people I talked to [at AFP], especially in the older demographic, didn’t see the value in mobile banking,” Ranta remarks. “There’s an opportunity there to educate the customer on the solution and the ease of use that mobile offers.”

Banks have invested in these solutions, but without this education they could put some of their customer relationships at jeopardy. If a customer doesn’t know about the products and services their bank offers there’s a risk that they could go looking for another bank. Almost 75% of the survey respondents at AFP said that have or would consider switching banks for better technology.

The need to educate customers also extends to online banking, as many large banks have recently rolled out new “Web 2.0” online banking platforms for customers, Ranta notes. “Some of their clients aren’t on those new platforms yet. If banks miss out on the opportunity to educate these customers and offer training, then there will be an opportunity for disintermediation,” he points out.

Although most of the focus on non-bank competitors in the industry has been on the retail side, there are definitely opportunities for non-bank entities to appeal to treasury banking customers as well, according to Ranta.

One of the biggest opportunities for a non-bank organization to gain a foothold in commercial banking could be in predictive analytics, Ranta says. ACI’s survey found that more than 80% of the respondents still rely on Microsoft Excel to do in-house analytics.

“Until someone figures out how to offer predictive analytics, treasury clients will be dealing with Excel-like products. Banks have made leaps and bounds with portals, but analytics is still in the dark ages; there’s definitely an opportunity for someone who figures that out,” Ranta explains.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

A few of the banks out there that have corporate mobile/tablet solutions have noted that some of their clients prefer using the mobile site as opposed to their main site due to the simplicity compared with their full solution. Simplicity and ease of use may be the main driver of adoption as opposed to the form factor itself. Also as the BYOD culture continues to evolve and gain more widespread acceptance so that may help drive adoption rates higher as well and something to keep an eye on as we start out this new year.

That was something that Mark spoke about. He said that some of the treasurers simply don't see the benefits of having mobile banking like being able to get approval from executives for payments when they are away from their desk.

This aligns somewhat with the article I posted about Capital One's survey of corporate treasurers: http://www.banktech.com/paymen... -- I was surprised at the relatively slow embrace of mobile for corporate banking, along with lack of plans to invest in new solutions. I think part of the issue is that in treasury services there has been a huge emphasis on efficiency and competitive pricing, which aren't mutually exclusive with tech innovation and new channels, but maybe is shifting the conversation somewhat.

Interesting to contrast this with commercial insurance, where the trend is customers leading insurers (sometimes reluctantly) into self-service capabilities. Whereas commercial banking, it seems that the banks are ready to go on omnichannel service, but their customers are the ones who are reluctant to embrace them full-bore.